European Territorial Cooperation
Annual Meeting
Financial Management and Audit
Caroline Callens,
DG Regional and Urban Policy, Audit Directorate
Head of Unit- C.3
Brussels, 23 April 2013
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Overview
1. Lessons learned from the current period
2. Set-up of the management and control system
3. Designation of MA/CA/AA
4. Responsibilities by designated bodies
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1. Lessons learned from the current period
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1. Lessons learned from the current period - Horizontal findings (1)
a)
Weak audit trail
• Lack of audit trail between the co-financed operation and its
expenditure and/or missing supporting documents
• Missing overheads and staff costs justifications/calculation not clear
b) Weaknesses in public procurement procedures
• Lack of open competition
• Lack of First Level Control checks on public procurement
c)
Lack of awareness of publicity rules
d)
Incomplete or insufficiently detailed FLC checklists
e)
FLC checklists not filled-in correctly
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1. Lessons learned from the previous period -Results of audits (2)
Decentralised First Level Control: More issues identified
Increased control and detection risk
• Multiple controllers
• Different levels of ERDF projects experience
• Poor quality checklists
• Difficulties in monitoring First level controllers by the MA/JTS
in the different Member States of the programme
New regulation for ETC
Possibility to use the controllers of
the ''mainstream'' OPs
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2. Set-up of the management and control system
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2. Set-up of the Management and Control System (MCS)
• Legal basis: CPR, ETC regulation not yet finalised
• Same Bodies : MA, JTS, (FLC) CA, AA, GoA
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2. Set-up of the Management and Control System (MCS)
• New elements by the ETC regulation :
– art.20 (Designation of authorities):
The MA and the AA shall be situated in the same Member State.
MS participating in a cooperation programme may allocate a single MA that will
also act as a CA.
– art.22 (4) (Functions of the MA)
Where the managing authority does not carry out verifications under Article
114(4)(a) of Regulation (EU) No […]/2012 [CPR] each Member State … shall
designate the body or person responsible for carrying out such verifications in
relation to beneficiaries on its territory ("controller(s)"). Those controllers may
be the same bodies responsible for carrying out such verifications for the OPs
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3. Designation
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3. Designation of MA/CA/AA (art.20 of ETC reg.,art.113 of CPR) (1)
• MS participating in a cooperation programme appoint a single
MA,CA,AA
notification to the EC of the formal act
• The designation is based on a report and opinion of an independent
audit body (may be AA) that assesses the compliance of the
designated authorities with the criteria as annexed in CPR
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3. Designation of MA/CA/AA (art.20 of ETC reg.,art.113 of CPR) (2)
• Compliance with criteria
(i) Internal Control environment (Organizational structure, Reporting and Monitoring for
irregularities, Separation of functions)
(ii) Risk management
(iii) Control activities (Selection procedures, Management verifications,
Payments, IT systems)
(iv) Information and communication
(v) Monitoring
• Track record: Independent audit body may take into account whether the
MCS is the same as in the previous period and has functioned effectively
• Probation/End of designation if no compliance with criteria
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3. Designation: Supervisory role of EC (3)
•
MS submits the formal act of designation to EC as soon as possible after
the adoption of the OP and before the submission of the 1st payment claim
•
If funding > €250m (limited to 4 cases in current period) then
• EC based on risk assessment may request, within 1 month of
notification of designation, the audit report & opinion and the MCS
description and make observations within 2 months
• The MS by its own initiative,(in case of substantial changes to MCS)
may submit within 2 month of notification of designation the
abovementioned documents and receive observations within 3 months
•
EC for its risk assessment will take into account whether MCS is
essentially the same, is effectively functioning and if the MA also
has CA functions.
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4. Responsibilities/Tasks
by designated bodies
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Managing Authority
•
Management verifications
administrative and on the spot
(art.22 of ETC Reg.& art.114 of CPR)
• Joint Eligibility rules (by the MS)
(art.17 ETC Reg, art.55 of CPR)
art.22 (4) of ETC Reg
Designation of controllers (FLC)
performing management verifications
in each participating MS in case MA
does not carry out verifications
throughout the whole programme area.
• Increased use of flat rates (art.18 ETC Reg, art.58 of CPR)
• Management declaration accompanying the accounts
An annual summary of final audits and controls (Art. 114(4)(e)) of CPR
Certifying Authority
Accounts for the preceding accounting year
(Art. 115(b)(c))
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Audit Authority
• Audit strategy within 8 months of the adoption of the OP but to
be submitted only upon request by the EC
• Art.23 of ETC Reg.-1 AA for all members of GoA
• Carry out audits on :
• systems as in the current programming period
• operations (Timing and organisation):
12+ Months (1/1/N until 15/2/N+1) to audit operations and establish
the audit opinion
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Audit Authority
• Audit accounts
• (Art. 116 (5)(i),(ii)):
Audit opinion accompanied the documents of MA and CA
Annual control report supporting the audit opinion
*delivers separate audit opinions on accounts and legality and regularity of
transactions
Timing: FR Article 56 (5)
15/2 (exceptionally,1/3)
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Questions??????
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